Oil majors lead FTSE 100 out of five-day slump

LONDON (MarketWatch) — Oil firms led U.K. stocks higher on Friday after HSBC initiated coverage of several energy giants with overweight ratings, while the broader benchmark index recovered after a five-day losing streak after better-than-expected U.S. jobs data.

The FTSE 100 index
UKX, -1.37%
rose 0.8% to close at 6,551.99, after closing at the lowest level since mid-October on Thursday. On the week, the index lost 1.5%.

Shares of Royal Dutch Shell PLC
RDSB, -1.82%RDS.B, -1.19%
climbed 2.9% after HSBC initiated coverage of the oil major with an overweight rating. HSBC also started coverage of BP PLC
BP., -2.24%BP, -1.44%
0.5% higher, and BG Group PLC
UK:BG
up 1.1%, with overweight ratings.

The analysts said the sector remains out of favor with investors, but that the companies’ robust underlying cash flows aren't being recognized. Oil prices were higher.

The London index moved a notch higher in afternoon trade after U.S. jobs data showed that the labor market in the world’s largest economy is improving. The unemployment rate fell to 7% in November from 7.3% in October and the nonfarm-payrolls report showed 203,000 new jobs were added to the economy, with both figures beating analyst estimates.

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